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Title:The impact of fiscal rules on public finances: Theory and empirical evidence for the Euro area PDF Logo
Authors:Marneffe, Wim
van Aarle, Bas
van der Wielen, Wouter
Vereeck, Lode
Issue Date:2010
Series/Report no.:CESifo working paper: Fiscal Policy, Macroeconomics and Growth 3303
Abstract:This paper presents a review of the most significant fiscal rules policymakers can choose from. The insights from this review are then applied to the current budgetary situation of the European Union. In the European Union, the supranational Stability and Growth Pact (SGP) should provide the necessary guidance in limiting governmental borrowing by member states. In addition to the SGP, European countries are implementing various other fiscal rules that bind central, regional and local governments. We provide empirical estimates of the effect of fiscal rules on fiscal balance, government spending and government revenues, using a Fiscal Rule Index. We find that fiscal rules have some effect on fiscal balances.
Subjects:euro area
fiscal policy
policy rules
fiscal sustainability
JEL:F31
F41
G15
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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